[Dave Birch] Last week’s British newspaper headlines about a top snooker player offering to throw frames for large amounts of Eastern European cash is only the latest in a long and increasingly frequent series of sports betting scandals. You may, for example, have been following an interesting story coming from Asia concerning corrupt practices, illegal gambling rackets and other malfeasance in a major sport. No, not cricket’s Indian Premier League (IPL)…

Sports officials suspended the founding commissioner of a popular cricket league in India on Monday and asked him to respond to claims that he had rigged team auctions and improperly structured a broadcasting deal… The suspension is the latest development in what many analysts have described as the biggest scandal in Indian cricket since at least 2000, when several prominent players were accused of fixing matches.

[From Indian Premier League’s Chief Is Suspended in Cricket Scandal – NYTimes.com]

I’m not talking about the real world (as usual) but the virtual one. In Korea, there is a scandal just as big as the IPL one going on but it stems from people with broadband rather than balls.

The largest scandal in e-sports history is currently unfolding in Korea, with revelations that a number of current pro gamers are involved with match set-ups and illegal betting… the story is said to touch many A-list StarCraft celebrities – including sAviOr, Ja Mae Yoon – one of the best-known and most successful players of all time… At this stage, we hear that various pro gamers have been found intentionally losing matches, as well as leaking their team’s replay files to illegal gambling groups.

[From StarCraft cheating scandal rocks Korea « GamePron]

For those of you not familiar with the genre, Starcraft is a computer game from Blizzard (the same people behind World of Warcraft), but the players are spaceship pilots instead of wizards.

After its release, StarCraft rapidly grew in popularity in South Korea, establishing a successful pro-gaming scene. Professional gamers in South Korea are media celebrities, and StarCraft games are broadcast over three television channels dedicated to the professional gaming scene. Professional gamers in South Korea have gained television contracts, sponsorships, and tournament prizes, allowing one of the most famous players, Lim Yo-Hwan,to gain a fan club of over half a million people. One player, Lee Yun-Yeol, reported earnings in 2005 of US$200,000.

[From StarCraft – Wikipedia, the free encyclopedia]

Just to reiterate: there are three TV channels dedicated to this game! It must happen here too as the broadband penetration rises toward Korean levels, and while I can’t imagine turning on the TV to watch someone else playing World of Warcraft, I can at least see that it would be more interesting than the BBC’s Reithian triumph, “Hole in the Wall“.

Anyway, I’m sure you’re all thinking that gambling on non-existent players in imaginary worlds is some bonkers Korean phenomenon that is culturally isolated and not replicable. Certainly not here in the staid and sensible UK. Wrong.

The leading retail and online bookmaker Paddy Power has announced that it will be taking bets on video game competitions starting with Super Street Fighter IV.

[From News: First ever video game betting service announced – ComputerAndVideoGames.com]

I’ve got a fiver on the kid in his pants eating tuna out of a can.

There’s a serious point here. Providing services to support gambling (paying in and paying out), in-game purchases and peer-to-peer conditional payments will be a big business and it’s not addressed by the “conventional” card schemes (in some cases because it’s illegal for them to do so!) so there are going to be many opportunities for innovative new startups to work in this space. At the excellent “Risk and Regulation” seminar that I went to recently, the case study was Norway. Norway has just banned online gambling to protect the revenues of its state lottery (which which I am oddly familiar, since they were users of Mondex back in the day). They’ve done this by banning payment schemes from handling gambling transactions. The result is not, as you might imagine, that Norwegians have given up online gambling and gone back to whittling pastoral scenes from whalebone, but that a slew of innovative new payment schemes have sprung up (one of which I will be podcasting about in the summer).

People sometimes joke that innovation is driven by the demands of the 3G network (girls, games, gambling) but there is more than a grain of truth in this. Gambling in particular is a constant driver for innovation and I don’t see payments as being any different from any other component of that business. For example:

John Power, sponsors of the 2010 Kenyan Derby, today announced a major innovation in Sports Betting in Kenya, with the release of its MPESA betting system, which now allows clients from all over Kenya to place bets on international football events using only their mobile phone.

[From Mobile Money Africa » Blog Archive » Football Betting Innovation In Kenya via MPESA]

Remember, M-PESA currently has 47% of the adult population of Kenya using it, so this is hardly a niche play. But gaming, as distinct from gambling, offers just as many opportunities. Why can’t I link my dwarven warrior’s purse of gold pieces in the virtual World of Warcraft to my equally virtual bank account? We did some work, many years ago, on an idea for a games company to give away a shooting game for free but have the players buy ammunition during the game, but there was no payment system suitable (we needed a pre-paid micropayments system, basically) and I’m sure other people are working on similar ideas now.

These opinions are my own (I think) and presented solely in my capacity as an interested member of the general public [posted with ecto]

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